Lord Hodgson of Astley Abbotts (Con)

My Lords, I am very grateful to the noble and learned Lord, Lord Etherton, the noble Lord, Lord Bassam of Brighton, and the noble Baroness, Lady Barker, for putting their names to this amendment, as well as to a number of other noble Lords from across the House who signed the circular distributed to all Members of the House explaining the background to it. It will not have escaped the attention of your Lordships’ House that each of the signatories is from a different party grouping. I want to make it clear at the outset that there is no party-political angle to this issue. The amendment is about compliance with charity law. Before I go any further, I need to clear up one extraneous matter of a personal nature, which I expected would be raised by the promoters, who have done so in a carefully worded paragraph XVI of the additional briefing that they have circulated. The opening sentence reads: “The Hall expresses regret that the amendment is aligned with an agenda pursued by a disaffected President of some 14 years ago … He has waged a campaign against the Hall”. The disaffected president is called Richard Lyttelton, and it has been a long-standing objective of some of the defenders of the status quo at the Royal Albert Hall to attempt to discredit and undermine my work by alleging that I am a close friend of the Lyttelton family and merely a mouthpiece for Richard Lyttelton. The facts are these: over 50 years ago—not 15, 50—I was a friend of Richard Lyttelton’s elder brother, Johnny. Johnny was six or seven years older than Richard—a significant gap when you are in your 20s —and I had no dealings with him then. My friendship with Johnny regrettably came to an end when, as a result of ill health, he went to live permanently in Spain and died early, in his 60s, sadly. Forty years passed without my having any contact with the Lyttelton family. It was only about a dozen years ago, when I undertook the official review of the Charities Act for the Government and learned about the interplay between the Attorney-General and the Charity Commission, and, subsequently, its implications for the Royal Albert Hall, that I came across Richard Lyttelton again. Do I agree with some of what Richard Lyttelton says? Yes, I do. Do I agree with everything he says? I do not. Am I his mouthpiece? Do not be ridiculous. If I were, is it really likely that I could persuade my three co-signatories—three eminent and experienced Members of your Lordships’ House—to join me on a personal crusade? I am afraid this is an example of how the hall is quick to kick up any amount of sand —personal sand, if necessary—when it becomes worried that the daylight may be let in on its governance structure. Before I leave the point, I want to make it clear, as I am sitting beside my noble friend Lord Harrington, that I am sure he played no part in the drafting of that paragraph. I absolve him of any responsibility for it. He has no part in what I regard as a rather shabby exercise. With that, to horse. There are two important features. I make it clear that this is not—I repeat, not—an attack on the hall. The hall is an iconic institution, home to many celebrated moments in our national cultural calendar. Further, it does not seek to change the entitlements of seat-holders who are not members of the hall’s governing body. It seeks to take a small step to partially address the fundamental conflict of interest that lies at the heart of the governance of the hall. I will briefly explain. The construction of the Royal Albert Hall in Victorian times was funded by public subscription. In return for funds, individuals were allocated seats on, in effect, a freehold basis—a 999-year lease coterminous with the lease of the hall itself. They were free to make use of the seats as they wished. About 1,250, one-quarter of the 5,000 seats in the hall, were allocated in this way. They included some of the best seats in the house. The hall is governed by a 24-person council, of whom 19 must be seat-holders and one of whom must be the chairman. So some 80% of the body that controls the hall are seat-holders. This was a purely commercial arrangement and continued as such for a century. But three decisions changed the terms of trade completely. First, and most importantly, in 1967 the hall applied to become, and became, a registered charity. This altered its fundamental position. Charitable status brings benefits. It brings relief from VAT, gift aid on donations and the advantage of a registered charity number. But it also imposes obligations. Notably, it imposes a public benefit objective and, importantly, a requirement that trustees of registered charities must not take decisions in their role as trustee that benefit them personally. The second important development took place at around the same time. As the number of commercial lettings increased, it became clear that seat-holders would not want to attend every concert. The hall established what has become known as the ticket return scheme—TRS—so that seat-holders who did not wish to use their tickets for an event could pass them back to the hall box office and they would be sold at face value less a handling charge. The third and final change came about with the dawn of the internet. Some seat-holders decided it would be much more profitable to sell the seats they did not want to use, not via the TRS to the hall box office, but on the open market via such websites as Ticketmaster and viagogo. Members of the House can go and check on the websites this afternoon what seats are available from the Royal Albert Hall. If Members of your Lordships’ House were seeking to go to the Last Night of the Proms, for at least the last three years they would have paid between £1,000 and £1,200 for each £100 ticket. For pop concerts, the numbers have been much larger and reached a high point with an Ed Sheeran concert, where a £200 concert ticket was offered at £5,000. Ed Sheeran’s management team wrote to the Albert Hall asking it to circulate a note to all seat-holders deploring this practice and explaining how it made it impossible for an ordinary Ed Sheeran fan to attend his concerts. How much money the seat-holders make each year, as noble Lords would imagine, is a carefully guarded secret. But we do know—this is a public matter —that in a recent sale a box of 10 seats was offered for £3 million. That is £300,000 per seat. Remember, this is a charity. For a little detail, not all seats for all concerts are available to seat-holders. Promoters of events will wish to exclude seat-holders so that the promoter receives the revenue resulting from the sale of that quarter of the seats owned by seat-holders, which otherwise would accrue to the seat-holder personally—not the promoter or the hall itself. By contrast, seat-holders will want to maximise the number of concerts for which they will be included, particularly where the event in question may be commercially high-profile and therefore any resale of seats would potentially be highly profitable.